Small Businesses Hit Hard By Recession
Since it began in December 2007, the recession has had a profound impact on just about everyone
. In the business world, though, small businesses - those with annual sales of between $100K and $10 million - have been hit the hardest. In a recent study, the financial services market research firm Barlow Research released some very sobering statistics concerning today's approximately 8 million U.S.-based small businesses. The study highlights the grave concerns that small business owners have about their ability to remain solvent. Adding insult to injury, Congress was unable to push through a much-needed bill concerning small business loans. Without a doubt, the outlook for small businesses is gloomy.Major Losses
The recession has taken a toll on small businesses in the United States in a number of ways. Most telling, perhaps, is news that such businesses have lost an estimated $2 trillion in profits. When that amount is divvied up among the estimated 8 million small businesses in the country, each one has lost about $253K. These losses are sure to hit some small businesses harder than others; however, these worrisome figures are just the tip of the proverbial iceberg when it comes to the viability of today's average small business.
Sobering Statistics
Barlow Research's Quarterly Economic Pulse Survey, which was conducted in July, brings even more concerns about small businesses to light. For example, only one in ten of today's small business owners believes that the recession is over. 14% of them are less than 50% sure that they will be in business by August of 2011. Just one in three small business owners believe that their company's financial situation is improving - a dramatic drop from last quarter, when one in two of them believed so. Study author Bernie Kuechler doesn't believe that there will be appreciable job creation within the small business sector for the foreseeable future.
Limited Growth
The pessimism of today's small business owners is hardly surprising, especially in light of recent problems concerning small business loans. Many small businesses were hoping to expand their enterprises - or at least keep them afloat - with up to $30 billion in inexpensive capital for commercial banks that would be pumped into small business loans. However, the House went into its summer recess on July 30 without passing the bill. A Senate bill that would have increased the maximum size of Small Business Administration loans was also put on the back burner. In order to grow their businesses, hire more employees and otherwise stay afloat, then, many of today's struggling small businesses are going to have to wait - that is, of course, if they can survive the recession.
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